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New SAP business unit to focus on compliance

SAP is creating a business unit to wrap its compliance products with software from its recent acquisition of compliance software vendor, Virsa Systems Inc.

ORLANDO, Fla. -- SAP is wrapping its software packages around the technology gained from its recent acquisition of Fremont, Calif.-based Virsa Systems Inc. with the creation of a business unit that will focus solely on compliance.

The announcement is expected today at SAP's Sapphire user conference.

SAP spokesman Bill Wohl said the new unit will create a support team of more than 100 new personnel around the acquired Virsa Systems technology. The unit will ultimately allow SAP customers to better address Sarbanes-Oxley (SOX), the Health Insurance Portability and Accountability Act (HIPAA), Basel II for the banking industry and other regulatory requirements, he said.

"The more we talked with customers, the more we were able to see compliance spending as one of their core priorities," Wohl said.

More than 250 Virsa employees will also be added to the new business unit. Before the acquisition of Virsa in April, SAP relied on Virsa and other partner vendors to fill the gaps in its portfolio. Wohl said many of the features that customers need to comply with regulations could be found in SAP's application suite.

Last year SAP began offering Virsa's Compliance Calibrator as an add-on to mySAP ERP and its SAP R/3 software. The partnership included a joint marketing agreement in the United States and Europe.

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The Virsa software specifically addresses Section 404 of the Sarbanes-Oxley Act, which requires a company to file a report by management on the company's internal control over financial reporting and an accompanying auditor's report.

Wohl said the new business unit will allow SAP to offer companies a roadmap for implementing a complete governance, risk management and compliance portfolio. SAP Global Trade Services and other SAP applications will be marketed under the unit by specific industry, he said.

The acquisition of Virsa promises new vertical functionality for users and a group of software developers that could create better compliance products for the SAP portfolio, said Joshua Greenbaum, principal consultant of Berkeley, Calif.-based Enterprise Applications Consulting.

"SAP is planning to use Virsa as a sub-ecosystem on which new products can be based, and will be going out to the software community to find partners willing to develop this new platform in coming months," Greenbaum said in a recent column for

SAP said the new unit will address problems identified as companies consider complete governance, risk and compliance. Highly fragmented business processes and systems that add to the cost of managing risk are causing pain as companies address compliance. Companies are also having difficulty mapping out a phased approach to addressing compliance and risk, SAP said.

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